TRANSCRIPT

JEFFREY BROWN: Next: a modern spy story involving Russia and the United States once again.

The announcement came late this afternoon from the Justice Department: 10 Russia intelligence officers arrested for allegedly serving as illegal agents of the Russian government in the United States.

A statement was released saying that eight individuals were arrested Sunday for allegedly carrying out long-term deep-cover assignments in the United States on behalf of the Russian Federation. It went on to say that two additional defendants were also arrested Sunday for allegedly participating in the same Russian intelligence program within the United States.

Each of the 10 faced charges, including conspiracy to act as an agent of a foreign government. Nine of the defendants are also charged with conspiracy to commit money laundering. Court papers said their main mission was to — quote — “search and develop” ties in policy-making circles in the United States, instructions they received from Russian intelligence headquarters in Moscow.

The arrests come just a week after Russian President Dmitry Medvedev visited the United State, touring Silicon Valley in California, to underscore what he and the White House say is a new era in the U.S.-Russian relationship.

After White House talks last week, Medvedev and President Obama celebrated what they called the successful reset of the bilateral relationship.

U.S. PRESIDENT BARACK OBAMA: When I came into office, the relationship between the United States and Russia had drifted, perhaps to its lowest point since the Cold War. There was too much mistrust and too little real work on issues of common concern. That did not serve the interests of either country or the world.

Indeed, I firmly believe that America’s most significant national security interests and priorities could be advanced most effectively through cooperation, not an adversarial relationship with Russia.

JEFFREY BROWN: The arrests occurred in a number of locations along the East Coast: Montclair, New Jersey; Yonkers, New York; Manhattan; Boston; and further south to Arlington, Virginia. One defendant remains at large.

The case is a result of a multiyear investigation by numerous government agencies, including the FBI.

And to take a closer look, we turn to Mark Hosenball, an investigative correspondent for “Newsweek” magazine, and Glen Howard, the president of the Jamestown Foundation, which focuses on terrorism and intelligence issues in Russia and other countries.

Welcome to both of you.

Mark Hosenball, what can you tell us about the people involved and what they were doing?

MARK HOSENBALL, investigative correspondent, “Newsweek”: Well, these are a set of apparently four apparently married couples, long-term Russian, illegal, penetration agents who came to the United States literally pretending — very well-schooled, very well-trained in espionage, very well-trained in America’s — but they’re Russians.

And their job was to infiltrate the United States, establish themselves as Americans, essentially, or fake Americans, and then to go around not actually stealing American secrets, but rather looking for people that they could refer to Moscow who then would be recruited to steal secrets.

JEFFREY BROWN: And this notion of the deep cover, kind of living as Americans, how did they do that? Some of their names were…

MARK HOSENBALL: They gave themselves fake names. They created so-called legends, stories for themselves and backgrounds. They — they planted themselves in communities, and, you know, actually raised families in some cases of American children.

This is sort of classic Cold War espionage. The Russians used to do this throughout most of the Cold War, but we thought that — at least we thought, I guess, that some of this was over by now.

JEFFREY BROWN: And this — this — this line, very intriguing here, about to search and develop ties in policy-making circles, now, what does that mean? What — who were the targets you say they were looking to make contact with, people in policy-making circles?

MARK HOSENBALL: Well, they have given me — the authorities that I have spoken to have given me some examples as to the sort of people, the sort of talent that they were spotting. They apparently had some contact with some kind of nuclear engineer who was working on weapons programs.

They had contact with some kind of fund-raiser here in Washington who had good connections apparently into the Obama administration. They apparently were assigned to go around to universities or one or more universities and try and find out who the CIA was recruiting from the students at those universities, so that then they — other people in the SVR could target those CIA recruits for potential recruitment as intelligence informants.

So, you know, this was — and, apparently, they were also tasked to find out information before President Obama went to Russia about a year ago on his first trip. So, they were — but they were not assigned — one of the things they were not assigned to do was to — or at least one of the things they were not accused of doing, anyway — is obtaining American secrets themselves.

They were setting up other people to obtain American secrets.

JEFFREY BROWN: All right, so, Glen Howard, give us some background here. I mean, you — the details are just coming out here. And we’re all just learning them in the last couple hours.

But the — the agency behind all this, who are they?

GLEN HOWARD, President, Jamestown Foundation: Well, this is the Russian intelligence service working in the United States, but they were basically using assets that they have recruited or Russians working — living and working here in the United States that are employed by the Russian intelligence services.

So, this is a part of a network that they have been establishing deep inside these communities where they have been assigned to work and to develop access to the most important aspect, which I thought was access to policy-making circles.

JEFFREY BROWN: Well, now, what does that — what does that mean? I mean, Mark was referring to Cold War era. We remember the — you know, the — looking for nuclear secrets, for example. What would — what would they be looking to gain now?

GLEN HOWARD: I think the — one of the things you mentioned is their ability to target fund-raisers for different political parties.

What they’re trying to do is gain access to some politician that, down the road, would be of some influence. And I’m sure the people that they were targeting didn’t know that they were dealing with Russian intelligence agents. But the point is, is that, once they get these people into their network and get into the fund-raising circle, then that’s the policy-making access that they so much desire, because it does — it ends up being points for them further down the road, when they want certain people to testify before Congress who may have links or people that they prefer to present certain points of view favorable to Russia.

I mean, this is all a part of an image-building process in the United States that has gone all around the country, even buying public relations companies working for the United States in Congress and on the Hill. That’s been very well known, I mean, about the extent of Russian influence.

JEFFREY BROWN: Well, very well known, so is it a coincidence? What’s the timing? What do you make of the timing here? Is it — we said it’s a week after the visit by President Medvedev and the two leaders coming together to say, hey, we’re getting together. It’s a reset of the relationship.

GLEN HOWARD: I think — I think it’s definitely a sign by the Obama administration and President Obama himself that, Dmitry, we can have a great relationship. And we don’t want to go back to the Cold War. But, by the way, I’m no pushover. And you’re doing things illegally in my country.

And he’s basically putting Moscow on notice that they can’t continue this type of activity. And it’s — I’m quite surprised by it, because I know that I have heard anecdotal incidences of FBI trying to push into the White House, trying to get this thing brought to the president, attention of the president, and trying to get some type of level of action to stop this level of activity that has surpassed Cold War levels.

JEFFREY BROWN: Surpassed, you say?

GLEN HOWARD: Surpassed. Russian spying activity in the United States is now greater than it was during the Cold War.

JEFFREY BROWN: So, Mark, if a lot of this was known, are there any signs that, in this particular case, that the effort had any successes or impact?

MARK HOSENBALL: Well, they do say that they managed to get in touch with this fund-raiser.

JEFFREY BROWN: Right.

MARK HOSENBALL: Again, how much they managed to produce out of him, whether they got him to do anything for them, it’s not clear to me at this point. They did apparently manage to get contact.

Again, how much this produced for Moscow, we don’t know. We have seen no evidence here at all that any American secrets were compromised, although, again, there was some interest in cultivating people involved with the American nuclear weapons program. So, there are elements here that we don’t know.

On the other hand, we also know that the FBI has been on to this group for what was described to me as several years.

JEFFREY BROWN: Years, right? I mean, that’s intriguing as well.

MARK HOSENBALL: Correct.

JEFFREY BROWN: Yes.

MARK HOSENBALL: They seem to have been — at one point, been able to plant Russian-speaking undercover informants or officers — we don’t really know — they’re just described as U.C. in here — on these people and pretended that they were SVR officers themselves.

So, there’s a very elaborate operation that went behind this. And they obviously know a lot about this that they’re not necessarily telling us.

JEFFREY BROWN: And it was ongoing for years, but very little — you knew nothing…

JEFFREY BROWN: … know much about it.

MARK HOSENBALL: I spoke this afternoon to somebody whose job it is within the government to at least know some things about counterintelligence. And they said that they hadn’t heard a word about this.

Nobody is denying that the Russians have been up to stuff like this. It’s just that this particular operation seems to have been very closely and well held.

JEFFREY BROWN: Had you heard of any — of any — something like this in the works?

GLEN HOWARD: Yes, for the past couple — not in the works now, but for the past couple of years, there have been these types of reports. And the key thing here is to bear in mind that, after 9/11, the United States, President Bush and President Putin at the time had a gentleman’s agreement that they wouldn’t conduct using their diplomats. They would not be using spying inside the United States.

And the key thing that so far they have adhered to this gentleman’s agreement, but they have been using — at lower levels, they have been using these plants that they — these people in these communities. They have been using that network flagrantly. And it has been brought to the attention several times before.

And only now have they decided to act on it and to break up these networks, because they have been flying under the radar, and that’s in these communities.

JEFFREY BROWN: I’m sorry.

And, briefly, what happens next?

MARK HOSENBALL: Well, they bring these people into court. One of them is still on the run. And my understanding is that one was an intermediary. He was what they call a cutout whose job it was to pass messages and money backwards and forwards between the SVR and these people. They didn’t catch him, but they have these other people in custody.

They bring them into court. And we see whether they are — they want to go to trial or whether they plead out. And then we will find out more information about this whole thing.

JEFFREY BROWN: All right, Mark Hosenball and Glen Howard, thank you very much.

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